In a recent conversation with a founder and CEO of a fast growing digital content company, we pondered why most of the buzz and celebration around tech startups these days is when they raise money or, occasionally, undergo an exit like an IPO or acquisition. There's nothing wrong with the heightened interest that surrounds these material events. It is justified. But there are other events that are equally — perhaps more — meaningful that go unnoticed, or are just not considered sexy. Consider when a startup delivers extraordinary value and happiness to a customer. Or steadily changes the way a sector does business. Or executes magnificently over the long term.
Which is why I was intrigued by this sentiment of Steve Jobs, surfaced by Steve Lohr, a reporter for the New York Times:
In a conversation years ago, Mr. Jobs said he was disturbed when he heard young entrepreneurs in Silicon Valley use the term “exit strategy” — a quick, lucrative sale of a start-up. It was a small ambition, Mr. Jobs said, instead of trying to build companies that last for decades, if not a century or more. That was a sentiment, Mr. Jobs said, that he shared with his sometime luncheon companion, Andrew S. Grove, then the chief executive of Intel. “There are builders and traders,” Mr. Grove said on Tuesday. “Steve Jobs is a builder.”
I've spent most of my working years working in advertising technology startups. While it is a desire of mine to make money, I can honestly say that my first motivation has always been to contribute to the building of something important — something that would have an everlasting impact. None of the startups I've worked ever came close to the scale of Apple, but I still feel they all had important ambitions in their respective niches. This intention is important among founders, early management teams and others closely involved, because it tends to have a strong link to outcome. On an individual and team level, this intention of building is what keeps you from sleeping because you want to pursue it, and it's often what keeps you slugging it out when things aren't going so well.
Trading is important, but the motivation to build something important is foundational.
What do you think?
Building to flip is building to fail. Agree 100% with Jobs, though startups need money and VCs need to believe that you want to exit before they invest. It’s a condition brought on by VCs – the first VC who asked me about my exit strategy caught me off guard, but over the years I don’t recall any serious VC discussion where this point wasn’t discussed.
Agree. Exit is not a bad word, but it should be a byproduct of something bigger, preferably.
I think your last line sums it up. Trading is not “bad” — it’s just not the Noble Path. Everyone has a skill and some people have the skill of “trader” and that’s okay. I was better at track then I was at soccer, even though I like soccer more. Moral of the story: if it’s your life, do what you love, if it’s your livelihood, do what you’re good at 🙂
Right on, Nate.